I inherited a $1M NYC rental with a 3.6% yield, but high taxes, maintenance, and fees drag net income down. Is using leverage in real estate inherently disadvantageous?
i think leverage adds risk but can crank up yields if you manage it right. full-pay gives stability but may miss scaling profits thru reinvestment. its not inerentely bad, just a differnt stratgy for growth.
Having managed a similar property setup, I found that full ownership offers admirable stability, but in today’s market, a well-calculated use of leverage may be beneficial. Despite initially higher risks, modest borrowing allowed me to diversify investments while maintaining a strong cash flow. The key is to identify markets with lower interest rates and stable returns, ensuring that the additional debt does not overwhelm the portfolio during economic downturns. My experience leads me to recommend a careful balance between leveraging and maintaining sufficient liquidity to handle unexpected expenses.
Hey everyone, I’m considering that leverage might not be bad if managed well. I’m curious, has anyone experimented with a mix of full ownership and strategic debt? What challenges or surprises did you encounter along the way?
hey, im leaning towards some debt use. it hurts nothing if done wisely. a bit of leverage might free up money for other ops without too much extra risk. just crunch numbers real careful.